Provision of basic sanitation goes to the heart of human dignity and improving health and well-being of populations. And yet, it is the single most neglected target of the Millennium Development Goals.
So where does social entrepreneurship fit in all this?
This was the topic of a recent workshop jointly held by the Toronto for Acumen chapter, and Young Social Entrepreneurs of Canada. Aptly titled, “In the Investors Chair,” the workshop was held at the Centre for Social Innovation, and attended by a diverse group of young professionals and students all interested in learning more about social entrepreneurship and the Acumen Fund’s investing model. The workshop was conducted using a case study that illustrated why the nonprofit social venture firm, Acumen Fund, invested in Ecotact, a social enterprise in Kenya that provides environmentally-responsible sanitation.
Photo credit: Acumen Fund
It has been more than 30 years since the Kenyan government invested in public sanitation facilities in Nairobi, home to some of the largest and most densely populated informal settlements in the world. The official water and sanitation regulators and providers, the Nairobi Water and Sewerage Company and the Athi Water Services Board, estimate that only 24 percent of residents in Nairobi’s informal settlements (with a total population of up to 2 million) have access to toilets. Existing public and communal facilities lack hygiene, privacy, security and accessibility. This has direct implications for women and girls in particular, who are at risk of assault, and have more pronounced needs for private and safe facilities. Unable to leave their houses after dark to use the toilets, they often have to resort to the indignity of defecating in plastic bags or in the open.
And this issue is not just specific to Kenya. Worldwide, some 1.1 billion people defecate in the open, either by choice or necessity. Water-borne diseases are the major causes of global illness that, in the past three years alone, killed an estimated 4.5 million children under the age of five.
Photo credit: Glória Regina Roheim
The founder of Ecotact is David Kuria, a Kenyan architect with a vision to improve standards of hygiene in public toilets, reduce urban pollution from human waste, and restore dignity in the provision of sanitation services among Kenya’s urban poor.
Sitting in the hypothetical “investor’s chair” at the workshop, we had an opportunity to study the case, look at the financials, and ask the “devil’s advocate” questions on whether we would invest in Ecotact – How sustainable is the enterprise? How risky is it? What is the social entrepreneur doing to mitigate the risks? What local factors need to be taken into consideration? Does the design address the problem, and issues such as gender-equity, access, affordability and relevance? How many people at the base of the pyramid will be served?
What followed was an engaging discussion on the social, political and economic factors of the sanitation problem in Kenya and Ecotact’s potential to address key problems. The comments came from participants’ personal experience, expertise and instinct (which, we came to realize, are key characteristics that social entrepreneurs and investors need to have). And at the end, we were left with one question – would we invest in Ecotact? The responses were mixed. Some said there was too much risk, while others thought the business addressed an urgent development issue.
The Acumen Fund did invest in Ecotact. Kuria’s idea showed potential for social impact, financial stability and scale – three factors of success that the Acumen Fund measures itself against. And Kuria, an ambitious and committed entrepreneur, made a compelling case. He presented a truly holistic, relevant and transformative solution that directly impacted the lives of the poor.
At the end of the workshop, I asked people what they thought of the event. Some said they appreciated the informal and intimate environment in which they could network and do collective brainstorming. Others said the interactive case study approach broke down the jargon and got them thinking beyond the buzz words. I heard consistently that while Ecotact is just one example, this case study provided a fantastic preview to the kind of due diligence that goes into social impact investing, how social entrepreneurship can be a catalyst for public-private partnerships and development initiatives, and how the right kinds of investments can jump-start the ideas of social entrepreneurs.
Toronto for Acumen, a volunteer-run chapter, supports this mission by actively championing and fundraising to support Acumen Fund’s innovative model of investing patient capital in enterprises that solve the problems of poverty. Since its founding in 2001, Acumen Fund has invested more than $45 million in enterprises that provide access to water, health, energy, housing and agricultural inputs to low-income customers in South Asia and East Africa. Visit www.acumenfund.org for more information.